For an economy in equilibrium, the Keynesian model suggests that the plot of aggregate expenditure against RGDP:
a. is a vertical line
b. has slope lesser than 1.
c. has slope equal to 1.
d. is a horizontal line.
c
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Starting from long-run equilibrium, the long-run impact of an increase in autonomous investment, compared to the original equilibrium, is:
A. higher inflation and higher output. B. lower inflation and lower output. C. lower inflation and the same output. D. higher inflation and the same output.
Which of the following describes an external benefit resulting from an individual's purchase of a winter flu shot? a. A flu shot is less expensive than the cost of treatment when you get the flu
b. The income of doctors increases when you get a flu shot. c. A flu shot reduces the likelihood that others will catch the flu from you. d. A flu shot reduces the likelihood that you will miss work as a result of sickness, and, therefore, you will earn more income.
One of the principal defects of using a commodity as money is that its worth as a:
A. commodity may exceed its worth as money, causing it to cease functioning as a medium of exchange. B. medium of exchange may exceed its worth as a store of value, causing it to cease being useful as money. C. medium of exchange may exceed its worth as a standard of account, causing it to cease being useful as money. D. unit of account may exceed its worth as a store of value, causing it to cease being useful as money.
Ricardian equivalence probably describes:
A. all people, since people are rational. B. nobody, since nobody is actually rational. C. some people, but not most people. D. most people, but not all people.